RYTHM, Inc. Reports Third Quarter 2026 Results

Federal changes would prohibit sales of current hemp-derived THC products in their existing form absent further action.

Rhea-AI Summary

RYTHM (Nasdaq: RYM) reported third-quarter 2026 revenue of $23.9 million, up 4% from the prior quarter, alongside a narrower annual loss.

Net loss was $533,000 versus $10.665 million a year earlier; operating income from continuing operations was $981,000. Adjusted EBITDA, a non-GAAP earnings measure, was $5.9 million versus $6.4 million in the prior quarter. Operating cash flow was $6.3 million, and cash reached $48.2 million. Hemp-derived product revenue rose 15% sequentially to $6.4 million.

Federal changes effective December 11, 2026, absent further action, would prohibit sales of current hemp-derived THC products in their existing form. Certain state restrictions start November 12. RYTHM is not providing fourth-quarter guidance. Its amended Green Thumb licensing arrangement adds Señorita and increases the aggregate annual fee to $70.25 million, subject to contractual annual escalations.

15 points · 2 major

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2 major · 10 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major pointThird-quarter revenue of $23.9 million rose 4% sequentially; the prior-year quarter generated $4.043 million.
• Major pointThird-quarter gross profit increased to $18.351 million from $1.375 million a year earlier.
• Moderate pointThird-quarter operating income from continuing operations reached $981,000 versus an $8.888 million year-earlier loss.
• Moderate pointThird-quarter net loss narrowed to $533,000 from $10.665 million a year earlier.
• Moderate pointCash increased to $48.2 million, with third-quarter operating cash flow of $6.3 million.
• Moderate pointHemp-derived product revenue increased 15% sequentially to $6.4 million.
• Moderate pointNine-month adjusted EBITDA reached $12.274 million versus negative $14.737 million a year earlier.

8 minor points

• Minor pointThird-quarter diluted loss per share narrowed to $0.07 from $5.33 a year earlier.
• Minor pointTHC beverage distributor shipments to retailers increased approximately 15% sequentially and approximately 185% year-over-year.
• Minor pointNine-month revenue increased to $60.163 million from $6.623 million a year earlier.
• Minor pointNine-month gross profit increased to $47.283 million from $2.147 million a year earlier.
• Minor pointNine-month operating loss from continuing operations narrowed to $1.117 million from $19.387 million a year earlier.
• Minor pointNine-month net income of $20.573 million included a $26.798 million income tax benefit, versus a $19.651 million year-earlier loss.
• Minor pointNine-month diluted earnings per share reached $1.55 versus a $9.96 loss a year earlier.
• Minor pointNine-month operating cash flow reached $16.026 million versus $20.519 million used a year earlier.

Negative

• Major point. Forward-looking: it has not happened yet and may not happen.Federal changes effective December 11, 2026 would prohibit current hemp-derived THC products in their existing form, absent further action.
• Major pointCurrent debt included $72 million of related-party debt and $8.624 million of other debt at September 30.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Certain state restrictions, including Illinois, would similarly restrict sales beginning November 12, 2026.
• Moderate point. Forward-looking: it has not happened yet and may not happen.11.2 million warrants and convertible notes covering 3.0 million shares represent potential dilution, excluding accrued-interest conversion shares.
• Moderate point49.99% beneficial ownership limitation removed from certain Green Thumb-linked instruments and the shared services agreement, effective October 10, 2026.
• Moderate pointThird-quarter operating expenses increased to $17.370 million from $10.263 million a year earlier.

4 minor points

• Minor pointThird-quarter adjusted EBITDA of $5.9 million fell from $6.4 million sequentially, versus negative $6.532 million a year earlier.
• Minor pointThird-quarter net interest expense increased to $1.663 million from $1.134 million a year earlier.
• Minor pointNine-month operating expenses increased to $48.400 million from $21.534 million a year earlier.
• Minor pointNine-month net interest expense increased to $5.132 million from $1.424 million a year earlier.

News Explained

The stated 49.99 percent ceiling is removed, and Green Thumb’s consolidation starts October 10; warrant and note-linked share amounts are separate from reported outstanding shares.

Amendments approved by stockholders on August 10, 2026, took effect on October 10, 2026, removing the 49.99% beneficial-ownership limit from certain convertible notes, pre-funded warrants and a shared-services agreement with Green Thumb subsidiaries.

Green Thumb disclosed it would begin consolidating RYTHM’s results from October 10, 2026; RYTHM says it will continue reporting independently in its own SEC filings. At quarter-end, RYTHM reported approximately 2.2 million common shares outstanding, alongside 11.2 million warrants and 3.0 million shares issuable upon conversion of notes, excluding accrued interest. A pre-funded warrant is sold at nearly the full share price with a nominal exercise price and converts to shares when exercised.

Key Figures

Revenue from continuing operations: $23.9 million Cash: $48.2 million Net loss: $0.5 million +5 more

Revenue from continuing operations

$23.9 million

Third quarter 2026; up 4% from the prior quarter

Cash

$48.2 million

At quarter end

Net loss

$0.5 million

Third quarter 2026

Adjusted EBITDA

$5.9 million

Third quarter 2026; compared with $6.4 million in the prior quarter

THC beverage depletions

Up approximately 15% sequentially and approximately 185% year-over-year

Third quarter 2026

Hemp-derived product revenue

$6.4 million

Third quarter 2026; up 15% sequentially

Aggregate annual license fee

$70.25 million, increased by $250,000

Amended licensing arrangement

Product sales restrictions

Nov. 12, 2026 (certain states); Dec. 11, 2026 (federal changes)

The article says the changes would restrict sales of current hemp-derived THC products

Previous Earnings Reports

1 past event · Latest: Aug 04

Same Type 1 event

1. Aug 04

   Quarterly earnings

   24h Move

   +23.2%

   Q2 revenue rose sequentially and earnings, adjusted EBITDA and cash improved versus prior periods.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

convertible notes, pre-funded warrants, non-gaap financial measures, gaap

4 terms

convertible notes financial

"shares issuable upon conversion of outstanding convertible notes"

Convertible notes are a type of short-term loan that a company receives from investors, which can later be turned into company shares instead of being paid back in cash. They matter to investors because they offer a way to support a company early on while giving the potential to own a stake in its success if the company grows and later raises more funding.

pre-funded warrants financial

"amended certain convertible notes, pre-funded warrants and the Company’s shared services agreement"

Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.

non-gaap financial measures financial

"This press release includes certain non-GAAP financial measures"

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

gaap financial

"in accordance with generally accepted accounting principles (“GAAP”)"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

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ROLLING MEADOWS, Ill., Nov. 04, 2026 (GLOBE NEWSWIRE) -- RYTHM, Inc. (Nasdaq: RYM) (“RYTHM” or the “Company”), America’s THC Company, whose portfolio of trusted THC brands includes RYTHM, Señorita, incredibles, Beboe, and Dogwalkers, today announced financial results for the third quarter ended September 30, 2026.

Financial Highlights for the third quarter ended September 30, 2026:

• Revenue from continuing operations of $23.9 million, up 4% from $23.0 million in the prior quarter.
• Cash increased to $48.2 million, driven by cash flow from operations of $6.3 million.
• Net loss of $0.5 million and operating income from continuing operations of $1.0 million.
• Adjusted EBITDA of $5.9 million, compared to $6.4 million in the prior quarter.
• At quarter end, the Company had approximately 2.2 million shares outstanding, as well as 11.2 million warrants outstanding and 3.0 million shares issuable upon conversion of outstanding convertible notes (excluding shares issuable upon conversion from accrued interest).
  

See definitions and reconciliation of non-GAAP measures elsewhere in this release.

Business Highlights

• THC beverage depletions¹ increased approximately 15% sequentially and approximately 185% year-over-year, reaching an annualized run rate of approximately 320,000 cases¹.
• Ended the quarter with the Company’s THC beverages available in approximately 8,000 retail doors across 18 states.
• Hemp-derived product revenue increased 15% sequentially to $6.4 million.
• Launched RYTHM Lifted Lemon, a new THC twist on iced tea and lemonade, further expanding the Company’s beverage portfolio.
• Increased brand visibility and consumer engagement through a presence at major entertainment and cultural destinations. Señorita was featured at Lollapalooza and Riot Fest in Chicago, Shaky Knees in Atlanta and is available at the United Center and Opry Entertainment Group venues. RYTHM is the official THC beverage partner of Chicago’s Navy Pier.
  

Regulatory and Corporate Updates

• Further amended the licensing arrangement with a Green Thumb Industries, Inc. (“Green Thumb”) subsidiary to add the Señorita brand to the fixed-fee license structure, increasing the aggregate annual fee by $250,000 to $70.25 million (subject to contractual annual escalations), while preserving the Company’s exclusive rights to commercialize Señorita outside state-regulated cannabis dispensary channels, where legally permitted and consistent with Nasdaq listing standards.
• Following stockholder approval on August 10, 2026, amended certain convertible notes, pre-funded warrants and the Company’s shared services agreement with subsidiaries of Green Thumb to remove the 49.99% beneficial ownership limitation, effective October 10, 2026. Green Thumb has disclosed that it will consolidate the Company’s results in its financial statements beginning October 10, 2026. The Company will continue to report its financial results independently, including in its own periodic reports filed with the SEC.
• Recent federal action extended the effective date of forthcoming changes to federal law affecting hemp-derived THC products from November 12 to December 11, 2026. Under current law, those changes take effect on December 11, 2026, absent further legislative or regulatory action, and would prohibit the Company from selling its current hemp-derived THC products in their existing form, including through the retail and venue channels described under “Business Highlights.” Certain state restrictions, including in Illinois, become effective earlier, on November 12, 2026, and would similarly restrict sales in those jurisdictions beginning on that date. Accordingly, the Company is not providing an outlook for the fourth quarter of 2026 at this time.
  

¹ Depletions represent U.S. distributor shipments of the Company’s branded THC beverages to retailers, measured in 24-can case equivalents, based on third-party data. Annualized run rate reflects third-quarter 2026 depletions multiplied by four and does not constitute a projection of future results.

Management Commentary 

"Third quarter revenue increased 4% sequentially to $23.9 million, driven by 15% growth in hemp-derived product sales to $6.4 million,” said RYTHM, Inc. Chairman and Interim Chief Executive Officer Ben Kovler. “Our THC beverages continued to build momentum, with depletions up approximately 15% sequentially to an annualized rate of 320,000 cases, while our retail footprint expanded to roughly 8,000 doors across 18 states. We also generated $6.3 million in cash from operations, driven by our licensing business, and ended the quarter with a strong cash position of $48.2 million. These results demonstrate growing consumer demand, continued commercial execution and the financial flexibility to navigate what’s ahead.”

“THC beverages are emerging as a fourth adult beverage category, alongside beer, wine and spirits, earning national shelf space and a presence at major entertainment and cultural venues. Leading retailers and wholesalers have been essential partners in that progress, and their support has helped establish the category’s credibility. Consumers continue to embrace THC beverages despite the forthcoming changes to federal law. We believe their future depends on drawing a clear line between regulated and unregulated products through a responsible regulatory framework that protects consumers and provides a viable path forward.”

“Against that backdrop, we continued to innovate and invest behind that opportunity, building sales velocity, brand awareness and in-store execution. Our posture is one of conviction with discipline. As America’s THC Company, we own some of the most recognized names in U.S. cannabis, and our THC beverages continue to extend our reach into traditional retail. Our brands are the foundation of RYTHM’s long-term value, and our presence across channels positions us to reach consumers as regulations evolve.”

The Company’s products are available direct to consumers at the following websites:

• Señorita THC Margaritas: https://www.senoritadrinks.com/
• 1777 by Señorita: https://www.1777spirit.com
• RYTHM Beverages: https://rythmdrinks.com/
• incredibles Edibles: https://iloveincredibles.com/
• Beboe Edibles: https://beboe.com/
  

Non-GAAP Financial Information

This press release includes certain non-GAAP financial measures as defined by the U.S. Securities and Exchange Commission. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”) are included in the financial schedules attached to this press release. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.

Definitions

EBITDA: Income (loss) from continuing operations before: net interest (expense) income, provision for (benefit from) income taxes, and depreciation and amortization.

Adjusted EBITDA: EBITDA from continuing operations: before stock-based compensation, change in fair value of warrant liabilities and exceptional items.

About RYTHM, Inc.

RYTHM, Inc.’s portfolio of THC brands includes the most recognized and trusted names in the cannabis and hemp industries, including RYTHM, incredibles, Dogwalkers, Beboe, Señorita THC Margaritas, &Shine, Doctor Solomon’s, and Good Green. With products available in thousands of physical locations and online, supported by an iconic lineup of brands rooted in quality and safety, RYTHM, Inc. is cementing its position as America’s THC Company. Through a focus on innovation, the Company is continually shaping THC experiences to meet the evolving preferences of consumers across the country. Learn more and explore the full brand portfolio at https://rythminc.com/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning RYTHM, Inc. and other matters. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements including, without limitation, statements regarding future financial results, regulatory trends, continued momentum for hemp-derived beverages, potential trends in the hemp-derived beverage and alcohol markets, and consumer trends. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “opportunity,” “looms,” “annualized” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. You should carefully consider the risks and uncertainties that affect our business, including the risk that Congress does not amend or repeal the pending federal prohibition on hemp-derived THC products prior to its December 11, 2026 effective date, and the risk that changes in state laws governing hemp-derived THC products, such as recent legislation in Illinois, adversely affect our ability to sell certain products, as well as those described in our filings with the Securities and Exchange Commission (“SEC”), including under the caption “Risk Factors” in our most recent Annual Report on Form 10-K, which can be obtained on the SEC website at www.sec.gov. These forward-looking statements speak only as of the date of this communication. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and filings with the SEC.

Investor Contact
IR@RYTHMinc.com

Media Contact
Media@RYTHMinc.com

RYTHM Inc.
Highlights from Unaudited Condensed Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2026 and 2025
(Amounts Expressed in Thousands of United States Dollars, Except for Share Amounts)
		Three months ended September 30,								Nine months ended September 30,
			2026				2025				2026				2025
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
	Revenue	$	23,857			$	4,043			$	60,163			$	6,623
	Cost of goods sold		5,506				2,668				12,880				4,476
	Gross profit		18,351				1,375				47,283				2,147
	Operating expenses		17,370				10,263				48,400				21,534
	Operating income (loss) from continuing operations		981				(8,888	)			(1,117	)			(19,387	)
	Other expense, net		(1,514	)			(1,745	)			(5,108	)			(1,725	)
	Loss from continuing operations before income taxes		(533	)			(10,633	)			(6,225	)			(21,112	)
	Income tax benefit		—				—				26,798				—
	(Loss) income from continuing operations, net of income taxes		(533	)			(10,633	)			20,573				(21,112	)
	(Loss) income from discontinued operations, net of income taxes		-				(32	)			-				1,461
	Net (loss) income	$	(533	)		$	(10,665	)		$	20,573			$	(19,651	)
	Basic income (loss) per share
	Continuing operations	$	(0.07	)		$	(5.31	)		$	1.57			$	(10.69	)
	Discontinued operations		—				(0.02	)			—				0.73
	Net (loss) income per share attributable to Common Stockholders – basic	$	(0.07	)		$	(5.33	)		$	1.57			$	(9.96	)
	Diluted income (loss) per share
	Continuing operations	$	(0.07	)		$	(5.31	)		$	1.55			$	(10.69	)
	Discontinued operations		—				(0.02	)			—				0.73
	Net (loss) income per share attributable to Common Stockholders – diluted	$	(0.07	)		$	(5.33	)		$	1.55			$	(9.96	)
	Weighted average common shares outstanding - basic		7,722,524				2,002,568				4,029,540				1,973,553
	Weighted average common shares outstanding - diluted		7,722,524				2,002,568				7,008,789				1,973,553

RYTHM Inc.
Highlights from Unaudited Condensed Consolidated Balance Sheet
(Amounts Expressed in Thousands of United States Dollars)
		September 30,
		2026
		(Unaudited)
	Cash and cash equivalents	$	48,244
	Other current assets		10,945
	Goodwill		9,713
	Intangible assets and related party prepaid license rights		38,956
	Deferred tax assets		26,798
	Total assets	$	134,656
	Accounts payable and accrued expenses	$	9,240
	Related party debt, current		72,000
	Long-term debt, current		8,624
	Current liabilities associated with discontinued operations		2,046
	Total long-term liabilities		675
	Total equity		42,071
	Total liabilities and equity	$	134,656

RYTHM Inc.
Highlights from the Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended September 30, 2026 and 2025
(Amounts Expressed in Thousands of United States Dollars)
		Nine months ended September 30,
		2026				2025
		(unaudited)			(unaudited)
	Cash flows provided by (used in)
	Operating activities	$	16,026		$	(20,519	)
	Investing activities		—			(55,075	)
	Financing activities		—			79,997
	Net increase in cash and cash equivalents	$	16,026		$	4,403

RYTHM Inc.
Supplemental Information (Unaudited) Regarding Non-GAAP Financial Measures
For the Three and Nine Months Ended September 30, 2026 and 2025
(Amounts Expressed in Thousands of United States Dollars)
			Three months ended September 30,								Nine months ended September 30,
				2026				2025				2026				2025
			(unaudited)				(unaudited)				(unaudited)				(unaudited)
	(Loss) income from continuing operations, net of income taxes		$	(533	)		$	(10,633	)		$	20,573			$	(21,112	)
	Interest expense, net			1,663				1,134				5,132				1,424
	Income tax benefit			-				-				(26,798	)			-
	Depreciation and amortization			3,520				1,795				10,444				2,530
	Earnings before interest, taxes, depreciation and amortization (EBITDA) (non-GAAP measure)			4,650				(7,704	)			9,351				(17,158	)
	Stock-based compensation expense			517				508				1,665				1,612
	Change in fair value of warrant liabilities			(149	)			664				(22	)			372
	Exceptional items1			920				—				1,280				437
	Adjusted EBITDA (non-GAAP measure)		$	5,938			$	(6,532	)		$	12,274			$	(14,737	)
	1Exceptional items correspond to costs incurred outside the ordinary course of business, including transition, restructuring, or other dislocation costs arising from or related to resizing initiatives, distributor termination fees, and other similar items.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were RYTHM's third-quarter 2026 revenue and net loss?

RYTHM reported $23.9 million in revenue and a $533,000 net loss for the quarter ended September 30, 2026. Revenue increased 4% from the prior quarter, while net loss narrowed from $10.665 million a year earlier.

When would the hemp-derived THC restrictions affect RYTHM's sales?

Federal changes take effect December 11, 2026, absent further legislative or regulatory action, and would prohibit sales of RYTHM's current hemp-derived THC products in their existing form. Certain state restrictions, including in Illinois, become effective earlier, on November 12, 2026, and would similarly restrict sales in those jurisdictions.

Will RYTHM continue reporting independently after Green Thumb begins consolidating its results?

RYTHM will continue reporting its financial results independently, including through its own SEC periodic reports. Green Thumb has disclosed that it will consolidate RYTHM's results beginning October 10, 2026.

What does RYTHM's annualized THC beverage case run rate measure?

The approximately 320,000-case annualized run rate equals third-quarter 2026 distributor shipments to retailers multiplied by four, rather than a projection of future results. Shipments are measured in 24-can case equivalents using third-party U.S. data.

What Señorita commercialization rights does RYTHM retain under its amended Green Thumb licensing arrangement?

RYTHM retains exclusive rights to commercialize Señorita outside state-regulated cannabis dispensary channels, where legally permitted and consistent with Nasdaq listing standards. Adding Señorita to the fixed-fee structure increases the aggregate annual fee by $250,000 to $70.25 million, subject to contractual annual escalations.